Opel's New Boss to Seek Concessions From Unions in Pay Talks

PSA Group completed a $2.6 billion takeover of Opel last year as General Motors sold off its loss-making European operations.

An Opel logo is seen on a car in Bordeaux, France, February 20, 2017. (Photo: Reuters)

Loading...

Opel's new chief executive has demanded concessions from labour unions to make the loss-making German carmaker more competitive, ahead of what he said would be a decisive round of pay talks with labour leaders.

"After making losses for almost 20 years in a row, the status quo is clearly no longer an option," CEO Michael Lohscheller told staff magazine Opel Post in an interview on Thursday.

The carmaker's works council last month demanded constructive proposals from French parent PSA Group after German sites were excluded from a sweeping investment plan pending the outcome of further pay talks.

PSA Group completed a $2.6 billion takeover of Opel last year as General Motors sold off its loss-making European operations, but CEO Carlos Tavares has been frustrated in his bid to cut high production costs.

Management will meet on Friday with the works council and labour union IG Metall, two sources said.

Cutting costs at the same time as raising wages will be difficult, Lohscheller said in the Opel Post report, adding that management asked IG Metall to suspend a collective wage increase during the negotiations.

The company cannot secure a sustainable future unless it becomes profitable, Lohscheller said, citing losses of 179 million euros suffered between last August and the end of the year.

He said he wanted to invest in Opel's German sites in Eisenach, Kaiserslautern and Ruesselsheim, but the prerequisite for strong investments was competitiveness.

"We need to be honest and admit that all of our competitors are already profitable and are continuously improving their performance," he said. "We are not at the level that would secure a sustainable future."